Fareeha Ahmad, who works for a start-up in the Bay Area, spent on average $50 on her Starbucks vanilla sweet cream cold brew every month. But the coffee company hasn’t seen a cent of Ahmad’s money in the last month.
“I stopped going to Starbucks when it came out that they were going to sue their union for posting in solidarity for Palestine,” she said. “Even though Starbucks hasn’t made it to the BDS (Boycott, Divest, Sanction) list, I still am boycotting Starbucks because they don’t align with my values.”
Earnest calls to boycott Starbucks, McDonald’s and other U.S.-based companies have flooded social media in recent weeks, as corporations face off with consumers, both over those companies’ perceived support for the Israeli military and lack of solidarity with Palestinians in the Israel-Gaza war.
The organized boycotts, so far, seem to be having a limited impact in the U.S. — but may be succeeding in achieving their aims abroad: videos of people confronting customers at Starbucks outlets in Turkey went viral and Al Jazeera reported an atypical lull in a popular branch of McDonald’s in Medan, Indonesia. Puma, long under fire for its sponsorship of the Israel Football Association, which includes clubs that play in illegal settlements, ended its deal with the Israel national soccer team in early December (though Puma said that the decision was made in 2022 and had nothing to do with the war).
BDS, the movement Ahmad is allying herself with, has called for global pressure on Israel since 2005, encouraging customers and countries to end support for the Israeli occupation of colonized Palestinian territories by avoiding Israeli products and companies that do business in or with Israel. That list includes consumer targets like McDonald’s, Burger King, Puma and Siemens, in addition to Starbucks, an organic boycott target.
Starbucks stock has shed 7.4% in the last month, as the combined impact of labor strikes, boycotts and a teetering holiday promotion hit sales to the tune of $12 billion in lost market value. Boycotts began in earnest after Starbucks sued its worker union, Starbucks Workers United (SWU), in federal court after the union published a statement on social media expressing solidarity with Palestinians. After mounting public pressure, CEO Laxman Narasimhan issued a statement saying he was “concerned about the world we live in” and the “misrepresentation on social media” of what the company stands for.
Starbucks stock fell amid bleak holiday sales, boycotts and contentious union negotiations.
Boycotts of McDonald’s, a company officially named in the Boycott list of the BDS movement, came after news broke on Instagram that the Israel-based franchise of the company was providing free meals to the Israeli Defense Forces (IDF). (The company’s Instagram account, @mcdonalds_israel, has since gone private.)
Still, it’s tricky to tie the momentum of a boycott trending online to impact on sales and stores, said Sean Dunlop, a Morningstar analyst for Starbucks, especially in a business environment where customers are pulling back from high prices and spending less during the holiday season. (An analyst for McDonald’s said he was not even aware of calls for a boycott of the fast-food company, and said that if boycotters were so inclined, they’d have boycotted McDonald’s for reasons other than the company’s activities in the Middle East.)
“That’s not to insinuate that these issues aren’t important—Starbuck’s EVP and Chief Partner Officer sent a letter regarding the firm’s intention to enter ‘good faith bargaining’ in 2024 with Starbucks Workers United,” he said.
Dunlop said that his firm could detect “no discernible impact” on Starbucks sales as a direct result of boycotts, instead attributing low sales to a general slowdown in restaurant traffic in the last 18 months.
The reasons some boycotts succeed and others don’t can come down to finding substitutes, maintaining strong motivation and time and expense involved in executing the boycott, per the American Institute for Economic Research. In a monopolistic market, it can be tough to find substitutes for say, Amazon. Though examples of successful boycotts often use Starbucks as an example of a product that does have more alternatives — local coffee shops — some estimates show that over 40% of all coffee shops in the U.S. are now Starbucks outlets.
Still, Starbucks was taking a hit even before October 7 because of its disputes with workers — the company lost $11 billion in market value after 12 straight days of dips, casting a pall over a record fourth-quarter performance of $9.4 billion in revenue.
David Paiz-Torres, a regular Starbucks customer based in Long Island, had already grown weary of the corporation’s union-busting activities and the suit against the union over its statement was “the final straw,” he said.
“I don’t know if I see myself going back to Starbucks anytime soon, unless they undergo some sort of leadership change, but even then I would be hesitant. CEOs come and go, but their values often stay,” he said. “I honestly don’t see this as Starbucks truly caring about what happened between Israel and Palestine, they are just using it as another opportunity to attack unions.”
In the U.S., corporate maneuvering to ensure brand safety may likely outweigh any concerns over a stance on geopolitics.
“While the firm’s willingness to negotiate in good faith with SWU could suggest a shifting balance of power, it’s more likely an effort to put an end to the barrage of negative media impressions the firm has received over the course of the union campaign,” Dunlop said.
In any case, consumers like Paiz-Torres and Ahmad don’t anticipate heading to Starbucks or McDonald’s soon: for Paiz-Torres, as long as Starbucks continues to fight its union; for Ahmad, as long as the companies remain on a BDS list.
Ahmad’s brother and sister-in-law have boycotted Starbucks for over 10 years, she added, saying that everybody she knew in the Muslim community and her non-Muslim friends were now joining as well. Ahmad’s networks are boycotting every single company on the BDS list.
“It’s hard to not boycott when direct community members have lost whole families,” she said. “Boycotting makes us feel a little bit less helpless and it’s the least thing we can do.”